Awash in Sales Tax

AWASH INSALES TAX How the little drops have added up. The Great Depression in the 1930s shook the American economy, prompting the government to look at new ways of generating revenue. $$% That's when sales taxes were first introduced as a taxing scheme to replace revenue losses of declining property taxes.' Mississippi was the first state to enact a By 1940, 23 states general sales tax in 1930. had implemented a sales tax. | 1910 | 1920 |12 | 1950 | 1960 | 1970 |1980 |1990 |200 1930 1940 This continued through the 1960s. No additional states enacted a sales tax between 1940 to 1947, but Tennessee resurrected the trend in 1947. Currently 45 states plus the District of Columbia impose a general sales tax. No sales tax Easy enough. You buy something in a store and you pay a sales tax on it. But wait-what if you bought the item from a catalog produced by a company based in another state? Possible loophole? No, it didn't take the government long to catch on to that. That's why a USE TAX was introduced. A use tax is typically assessed at the same rate as the sales tax that would have been owed (if any) had USE TAX the same goods been purchased in the state of residence. A use tax is the same mechanism that is used to collect taxes on items sold on the web. Now 25 states include a use tax line item on individual income tax returns? as a way of trying to enforce this tax. Along the way we started using this taxing scheme for more than just revenue generation. We have a whole slew of "sin" taxes (cigarettes, liquor, gasoline, hotels, amusement, luxury goods and now soft drinks and bottled water). TICKET Now we have created more than With the fiscal situation in most 8,000 states reaching near crisis, the complexity isn't improving. General and selective sales taxes were the largest source of state taxing authorities who are making government tax revenues in 2011, totaling $366.3 billion. This amount dwarfed even individual income taxes, which brought $259.1 billion into the states' coffers.3 new taxes and rate changes 400 350 300 at an average of 250- 200 150 아 GENERAL 48 per month & INDIVIDUAL SELECTIVE SALES TAX INCOME 100 TAX 50 How do sales taxes affect your business? YETTER can guide you through the process to help you determine what you need to pay and how to minimize the impact. Contact YETTER today at 312.701.1800 or yettertax.com tax meets technelog 1. http://www.ncsl.org/print/fiscal/STATEFINANCEGREATDEPRESSION.pdf 2. http://www.governing.com/blogs/by-the-numbers/state-use-tax-collection-revenues.html 3. http://www2.census.gowgovs/statetax/2011stcreport.pdf 4. http://www.vertexinc.com/PressRoom/PDF/2012/vertex-end-of-year-sales-tax-rate-report-11.pdf yettertax.com state tax revenue (in --------